ASX 24 OPERATING RULES
Guidance Note 10
MAINTENANCE OF A FAIR, ORDERLY AND TRANSPARENT
MARKET
The purpose of this
Guidance Note
• To assist participants to understand how ASX:
• interprets and meets its general obligation under the Corporations Act to
ensure that the ASX 24 market is fair, orderly and transparent; and
• applies its specific powers under the ASX 24 Operating Rules to take
action to ensure that the market for a product is fair, orderly and
transparent
The main points
it covers
• The meaning of “fair, orderly and transparent”
• The circumstances in which ASX might consider shutting the market
• The circumstances in which ASX might consider suspending trading in a
product
• The circumstances in which ASX might consider cancelling a trading error
using its powers under the ASX 24 Operating Rules to take action to ensure
that the market for a product is fair, orderly and transparent
Related materials you
should read
• The tables in Annexure A to this Guidance Note summarising the
circumstances in which ASX might close the ASX market, suspend trading in
a product or cancel a trading error
• ASX’s ‘Fair, orderly and transparent markets’ paper available online at:
http://www.asx.com.au/documents/regulation/fair-orderly-and-transparentpaper.pdf
History: Guidance Note 10 introduced 01/03/16.
Important notice: ASX has published this Guidance Note to assist participants to understand and comply with their
obligations under the ASX 24 Operating Rules. It sets out ASX’s interpretation of the ASX 24 Operating Rules and how
ASX is likely to enforce those rules. Nothing in this Guidance Note necessarily binds ASX in the application of the ASX 24
Operating Rules in a particular case. In issuing this Guidance Note, ASX is not providing legal advice and
applicants/participants should obtain their own advice from a qualified professional person in respect of their obligations.
ASX may withdraw or replace this Guidance Note at any time without further notice to any person.
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Table of contents
1.
2.
3.
4.
5.
6.
1.
Introduction
Regulatory framework
The meaning of “fair, orderly and transparent”
3.1. The meaning of “fair”
3.2. The meaning of “orderly”
3.3. The meaning of “transparent”
3.4. Balancing fairness, orderliness and transparency
When ASX will consider shutting the market
4.1. ASX’s powers to shut the market
4.2. When ASX will consider shutting the market
4.3. Loss of access by one or some participants
4.4. Events on other markets
When ASX will consider suspending trading in a product
5.1. ASX’s powers to suspend trading in a product
5.2. When ASX will consider suspending trading in a product
5.3. Market misconduct and rumours
Trading errors
6.1. ASX’s regime for cancelling trading errors
6.2. The application of ASX Operating Rule 3100 to trading errors
2
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3
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4
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5
6
6
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8
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9
Introduction
This Guidance Note is published by Australian Securities Exchange Limited (ASX) to assist participants to
understand how ASX:
•
interprets and meets its general obligation under the Corporations Act to ensure that the ASX 24 market is
“fair, orderly and transparent”; and
•
applies its specific powers under the ASX 24 Operating Rules to take action to ensure that the market for a
product is “fair, orderly and transparent”.
This includes explaining the circumstances in which ASX might consider shutting the ASX 24 market, suspending
trading in a product or cancelling a trading error pursuant to these obligations and powers. For convenience,
Annexure A to this Guidance Note has tables summarising those circumstances.
The circumstances set out in this Guidance Note when ASX may exercise its powers under the ASX 24 Operating
Rules are not intended to be exhaustive. In exercising its discretion to take or not to take action in respect of a
matter, ASX will have regard to the facts and circumstances applicable at the time, as well as the relevant
considerations under the ASX 24 Operating Rules.
2.
Regulatory framework
Under section 792A(a) of the Corporations 2001 (Cth)1 ASX is required to do all things necessary, to the extent
that it is reasonably practicable to do so, to ensure that the ASX 24 market is fair, orderly and transparent.
ASX 24 Operating Rule 3100 empowers ASX to take any action it considers necessary to ensure that a market for
one or more products is fair, orderly and transparent, including (without limitation):
•
suspending or halting trading in one or more products for any period of time;
Referred to in this Guidance Note as the “Corporations Act”. References in this Guidance Note to sections are to sections of the
Corporations Act, unless otherwise indicated.
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•
cancelling or amending any transaction;
•
directing any trading participant to take, or not to take, a specified action in connection with the affected
markets;
•
modifying or restricting access to a trading platform by one or more trading participants;
•
taking, or refraining from taking, any other action which ASX considers is appropriate;2
•
requesting any relevant approved clearing facility (or any relevant alternative clearing facility) to exercise its
powers relating to the situation or practice; and
•
directing that products be offered or settled at a price other than that provided for by the ASX 24 Operating
Rules, in such manner and on such conditions as it may determine. 3
The ASX 24 Operating Rules also require a trading participant:
•
to have adequate resources and processes to prevent any action or inaction which might result in a market
for a product traded on ASX not being both fair and orderly; 4 and
•
not to do anything which results in a market for a product not being both fair and orderly, or fail to do anything
where failure has that effect. 5
3.
The meaning of “fair, orderly and transparent”
3.1.
The meaning of “fair”
In ASX’s opinion, in the context of section 792A(a) and ASX 24 Operating Rule 3100, the word “fair” is used in one
(or possibly both) of two senses – ‘something that conforms to the applicable rules’ (as in a fair contest) and/or ‘free
from bias or injustice’ (as in a fair decision). 6
ASX seeks to meet its obligation to operate a fair market by having Operating Rules that clearly set out:
•
the criteria and process for someone to become a participant in the ASX 24 market;
•
the rights and obligations of participants under the ASX 24 Operating Rules;
2
In exercising this power, ASX is required to have regard to ASX 24 Operating Rule 6120. That rule in turn requires ASX to have regard
to the obligations, duties, powers and discretions: (a) which ASX has as the holder of, or in connection with, the holding of an Australian
market licence under Part 7.2 of the Corporations Act; (b) which an Approved Clearing Facility has as the holder of, or in connection with the
holding of, an Australian CS facility licence under Part 7.3 of the Corporations Act; (c) which an Approved Settlement Facility has as the
holder of, or in connection with the holding of, an Australian CS facility licence under Part 7.3 of the Corporations Act; and (d) which an
operator of any Underlying Market has as the holder of, or in connection with the holding of, an Australian market licence under Part 7.2 of
the Corporations Act. This would include its obligation as a market licensee under section 792A(a) to do all things necessary, to the extent
that it is reasonably practicable to do so, to ensure that the ASX 24 market is fair, orderly and transparent.
3
The ASX 24 Operating Rules also empower ASX to take any steps it considers appropriate to deal with a systems or communication
failure (rule 3110), to maintain the operational efficiency and proper functioning of a market or the trading platform (rule 3130) and to deal
with a state of emergency (rule 3140). In exercising these powers, ASX must also have regard to ASX 24 Operating Rule 6120 (see note 2
above), which again, requires it to have regard to its obligation as a market licensee under section 792A(a) to do all things necessary, to the
extent that it is reasonably practicable to do so, to ensure that the ASX 24 market is fair, orderly and transparent.
4
By virtue of ASX 24 Operating Rule 1400(a) combined with ASX 24 Operating Rule 1000(e).
5
ASX 24 Operating Rule 3101(a).
6
See ASX’s ‘Fair, orderly and transparent markets’ paper available online at http://www.asx.com.au/documents/regulation/fair-orderlyand-transparent-paper.pdf.
ASX considers that this reading of the word “fair” is supported by the decision in Transmarket Trading Pty Limited v Sydney Futures Exchange
Limited [2010] FCA 534 (the “Transmarket case”), where the court observed (at paragraph 95) that “fairness” in this context refers to “a state
of affairs in which all market participants are placed in an equal position such that there is level playing field.”
This formulation of fairness was accepted and applied by the ASX Disciplinary Tribunal in ASX Compliance Pty Ltd and Timber Hill Australia
Pty Ltd (15 December 2010) Matter No. 2009018 & 2009026, at paragraph 5.14.1.
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•
when a participant can have their participation in the ASX 24 market suspended or terminated,
and by seeking to apply those rules consistently and without inappropriate bias.
3.2.
The meaning of “orderly”
In ASX’s opinion, the word “orderly” is used in section 792A(a) and ASX 24 Operating Rule 3100 in the sense of
‘arranged or disposed in order, in regular sequence, or in a tidy manner’ or ‘according to established order or rule’. 7
ASX seeks to meet its obligation to operate an orderly market by:
•
having clear rules and processes governing:
•
how and when buy and sell orders will be matched;
•
the application of regulatory halts; 8
•
the correction or cancellation of trading errors; and
•
the ability of ASX to suspend trading, correct or cancel trades, or take other corrective action9 to help
avoid or rectify a disorderly market;
•
having trading systems that are secure, reliable and have sufficient capacity to handle reasonably
foreseeable peak levels of trading; and
•
endeavouring to ensure that there is nothing built into the specifications for the contracts traded on the
ASX 24 market that is inherently likely to lead to a disorderly market. 10
ASX notes that in relation to SPI 200 index futures and equity index futures contracts traded on the ASX 24 market,
the requirement for orderliness has, to some extent, been codified in Chapter 2 of the ASIC Market Integrity Rules
(Competition in Exchange Markets) 2011. That Chapter requires the operators of licensed markets that deal in
these products to have order entry controls for anomalous orders, to prevent transactions on its market in the
extreme trade range and to have transparent trade cancellation policies that include the mandatory cancellation of
trades within the extreme trade range which are identified by or to the market operator. Those requirements are
consistent with the interpretation of the word “orderly” put forward in this Guidance Note.
3.3.
The meaning of “transparent”
In ASX’s opinion, the obligation for a market to be “transparent” in section 792A(a) and ASX 24 Operating
Rule 3100 requires certain information, including in particular the prices and volumes at which orders to buy and
sell financial products are matched in the market, to be available or visible to all participants. 11
Again, see ASX’s ‘Fair, orderly and transparent markets’ paper available online at http://www.asx.com.au/documents/regulation/fairorderly-and-transparent-paper.pdf.
ASX considers that this reading of the word “orderly” is supported by the decision in the Transmarket case, where the court observed (at
paragraph 95) that the notion of “orderliness” in this context connotes “reliable market operations displaying price continuity and depth and
in which unreasonable price variations between sales are avoided.”
This formulation of orderliness was accepted and applied by the ASX Disciplinary Tribunal in ASX Compliance Pty Ltd and Timber Hill
Australia Pty Ltd (15 December 2010) Matter No. 2009018 & 2009026, at paragraph 5.14.2. That decision was affirmed on appeal by the
ASX Appeal Tribunal (2 May 2011).
8
In respect of futures contracts subject to the ASIC Competition Market Integrity Rules.
9
For example, the imposition of position limits or exercise limits on derivative positions.
10 This might arise, for example, if a contract imposed physical delivery requirements that, in practice, were difficult for participants to meet.
11 Again, see ASX’s ‘Fair, orderly and transparent markets’ paper available online at http://www.asx.com.au/documents/regulation/fairorderly-and-transparent-paper.pdf.
ASX considers that this reading of the word “transparent” is supported by the judgment in the Transmarket case. In finding that the market
events in that case did not infringe the requirement for transparency, the court commented (at paragraph 96):
“Nor is there anything which would suggest that the operation of the market was other than transparent. The market log of all trades was
available and it was not put, at any point, that there were market events which were concealed or not sufficiently exposed.”
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ASX seeks to meet its obligation to operate a transparent market by:
•
having systems and processes that:
•
allow participants to ascertain whether, and at what prices and in what volumes, they can deal when
they choose to use the ASX 24 market; and
•
give participants timely access to information about the prices and volumes of all individual
transactions concluded on the market; and
•
ensuring that its Operating Rules and the specifications for contracts traded on its market are publicly
available and readily accessible to all trading participants.
3.4.
Balancing fairness, orderliness and transparency
The phrase “fair, orderly and transparent” is a composite phrase of three potentially conflicting elements. It is
conceivable, for example, that something could be fair but not orderly or transparent, orderly but not fair or
transparent, or transparent but not fair or orderly. It is also conceivable that something could affect different
participants differently – that is, something might be fair to some participants but unfair to others.
The issues at play here are well illustrated by the observations of the court in Story v National Companies and
Securities Commission12 when interpreting another composite phrase – the obligation of financial service
licensees 13 to provide their services “efficiently, honestly and fairly”:
“Thus I turn to the phrase "efficiently, honestly and fairly". In one sense it is impossible to carry out all three
tasks concurrently. To illustrate, a police officer may very well be most efficient in control of crime if he just
shot every suspected criminal on sight. It would save a lot of time in arresting, preparing for trial, trying and
convicting the offender. However, that would hardly be fair. Likewise a judge could get through his list most
efficiently by finding for the plaintiff or the defendant as a matter of course, or declining to listen to counsel,
but again that would hardly be the most fair way to proceed. Considerations of this nature incline my mind
to think that the group of words "efficiently, honestly and fairly" must be read as a compendious indication
meaning a person who goes about their duties efficiently having regard to the dictates of honesty and
fairness, honestly having regard to the dictates of efficiency and fairness, and fairly having regard to the
dictates of efficiency and honesty ... ”
Applying a similar approach to section 792A(a) and ASX 24 Operating Rule 3100, this would suggest that to meet
its obligation to be fair, orderly and transparent, the ASX 24 market must be fair having regard to the dictates of
orderliness and transparency, orderly having regard to the dictates of fairness and transparency, and transparent
having regard to the dictates of fairness and orderliness.
The limited regulatory guidance as to how to interpret the phrase “fair, orderly and transparent” in section 792A(a)
is to similar effect and suggests that if there is a conflict between the elements of the phrase, the licensee is
expected to strike an appropriate balance between the demands of each element 14 – in other words, the licensee
must strike an appropriate balance between fairness, orderliness and transparency. 15
(1988) 13 NSWLR 661, at 672.
Section 912A(1)(a).
14 See ASIC Regulatory Guide 172 Australian market licences: Australian operators at paragraph 83.
15 The inclusion in section 792A(a) of the qualification “to the extent that it is reasonably practicable to do so” also lends support to this
construction. In this regard, the Explanatory Memorandum for the Financial Services Reform Bill (2002), which enacted section 792A(a),
made the following observations (at paragraph 7.38) about that section:
In interpreting the phrase `fairness, orderliness and transparency', it is desirable that all the words in the phrase be considered together.
One word taken out of context may lead to a course of action which conflicts with the other words in the phrase. Thus, transparency may
on occasions be in conflict with liquidity, yet liquidity is needed for an orderly market. The tensions between the three words need to be
resolved sensibly, so that an appropriate balance is struck between the demands of different market participants. This is specifically
acknowledged in the clause `to the extent that those objectives are consistent with one another'.
12
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ASX believes that the appropriate balance between fairness, orderliness and transparency is one which has regard
to the pivotal role that the ASX 24 market plays in the Australian financial system. ASX considers that the
requirement for a market to be fair, orderly and transparent should be biased towards an outcome that achieves
fairness from the perspective of most participants and orderliness and transparency from the perspective of the
market as a whole rather than an outcome that delivers fairness to an individual participant at the expense of the
orderliness and transparency of the market.
4.
When ASX will consider shutting the market
4.1.
ASX’s powers to shut the market
ASX has broad powers under the ASX 24 Operating Rules to shut the ASX 24 market where:
•
the market is not operating in a fair, orderly and transparent manner; 16
•
the trading platform is affected by a systems or communication failure; 17
•
ASX considers it appropriate to maintain the operational efficiency and proper functioning of the market or
the trading platform; 18 or
•
there is a state of emergency. 19
4.2.
When ASX will consider shutting the market
Given the pivotal role that the ASX 24 market plays in the Australian financial system, the decision to close the
ASX 24 market is not one that ASX would take lightly.
Generally speaking, ASX would only consider such a drastic course of action if:
•
ASX suffers a major systems failure that requires the market to be closed or the trading platform to be shut
down and re-booted; 20
•
there is an event preventing ASX from operating both its primary and back-up sites (eg a major earthquake,
flood or other calamity affecting both sites or simultaneous threats requiring staff to be evacuated at both
sites);
•
there is a widespread event (eg a major earthquake, flood or other calamity) preventing a significant
proportion of participants from operating both their primary and back-up sites; 21
•
ASX is subject to a successful “denial of service” attack that prevents a significant proportion of participants
from accessing the market;
•
there is major failure in Australia’s communication infrastructure that prevents a significant proportion of
participants from accessing the market;
The phrase `to the extent that those objectives are consistent with one another' was replaced in the final form of section 792A by the phrase
‘to the extent that it is reasonably practicable to do so’.
16 ASX 24 Operating Rule 3100.
17 ASX 24 Operating Rule 3110.
18 ASX 24 Operating Rule 3130.
19 ASX 24 Operating Rule 3140.
20 For example, on 17 September 2015, as a result of a technical issue all users were disconnected from ASX 24 platform and trading in
the entire market was halted for a short period until the problem could be rectified (see ASX Notices 1086.15.09 and 1096.15.09).
21 If a significant proportion of participants were affected by an event preventing them from operating their primary site, ASX might consider
halting the market or, if it has not yet started trading, delaying the open, to allow participants to fail over to their back-up sites.
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•
there is a state of emergency warranting the closure of the market (eg an armed invasion of the country,
large scale civil unrest or a pandemic affecting large numbers of staff at ASX and/or at a significant
proportion of participants); or
•
there is a significant announcement from the government or a regulator affecting the entire market that, in
ASX’s opinion, warrants the market being closed for a period to allow it time to absorb the announcement.
ASX may also be obliged to close the market if it receives a direction from ASIC under section 794D to do so.
The references above to a “significant proportion” of participants mean a proportion of participants that, in ASX’s
opinion, is so significant that their inability to participate in the ASX 24 market will affect the market’s ability to
perform proper price discovery.
4.3.
Loss of access by one or some participants
ASX would not regard the fact that an individual participant or group of participants is unable to access the ASX 24
market as rendering the market unfair or disorderly, provided there are enough participants who can access the
market to allow the market to perform proper price discovery.
For example, ASX did not shut the ASX 24 market during the December 2014 Lindt Café siege in Martin Place
even though a number of participants were unable to undertake normal operations because of the police exclusion
zone around the site of the siege.
4.4.
Events on other markets
ASX would not regard the fact that another market operator (such as Chi-X, NSX, SSE or FEX) is experiencing an
unfair, disorderly or not transparent market, or that it has shut its market in response to, or to avoid, that occurring,
as necessarily meaning that ASX’s market is also not fair, orderly and transparent or as requiring ASX to take
similar action. Whether the ASX 24 market is operating in a fair, orderly and transparent manner would need to be
assessed by reference to the particular circumstances affecting the ASX 24 market.
5.
When ASX will consider suspending trading in a product
5.1.
ASX’s powers to suspend trading in a product
Again, ASX has broad powers under the ASX 24 Operating Rules to suspend trading in a particular product where:
•
the market for that product is not operating in a fair, orderly or transparent manner; 22
•
the trading platform is affected by a systems or communication failure; 23
•
ASX considers it appropriate to maintain the operational efficiency and proper functioning of the market or
the trading platform; 24 or
•
there is a state of emergency. 25
5.2.
When ASX will consider suspending trading in a product
For obvious reasons, ASX is more amenable to exercising its powers to suspend trading in a particular product
than it is to shutting the entire market.
Generally speaking, ASX will consider suspending trading in a product:
22
23
24
25
ASX 24 Operating Rule 3100.
ASX 24 Operating Rule 3110.
ASX 24 Operating Rule 3130.
ASX 24 Operating Rule 3140.
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•
if there is clear evidence of disorderly trading in the product (eg due to the impact of a “rogue” algorithm)
and it is appropriate to suspend trading to prevent that disorderly trading from continuing;
•
if there has been an ASX system or process breakdown preventing the dissemination of information, or
causing the dissemination of materially false or misleading information, about the specifications of a product
or pre-trade or post-trade data about the product and it is appropriate to suspend trading to prevent orders
being placed and/or transactions occurring at an inappropriate price.
In each of the circumstances above, where trading has occurred in a product ahead of the suspension at a clearly
inappropriate price, ASX may also consider exercising its other powers under the ASX 24 Operating Rules to rectify
the situation, including by cancelling the transactions in question.
ASX may also be obliged to suspend trading in a product if it receives a direction from ASIC under section 794D to
suspend trading in the product.
5.3.
Market misconduct and rumours
As mentioned previously, ASX considers that the word “fair” has a particular meaning in the context of
section 792A(a) and ASX 24 Operating Rule 3100. ASX would not regard the fact that:
•
someone may be engaging in insider trading, market manipulation or other forms of market misconduct in
relation to a particular product traded on the ASX 24 market; or
•
someone may have spread a false rumour materially affecting the price or value of a product traded on the
ASX 24 market,
to mean that the market in that product, or the ASX 24 market generally, was not “fair”. Accordingly, ASX would
have no power under ASX 24 Operating Rule 3100 to suspend trading or to cancel or amend any trades on that
score.26 It would only be if the misconduct or rumour has somehow resulted in a disorderly market that ASX’s
powers under ASX 24 Operating Rule 3100 would be enlivened. 27
6.
Trading errors
6.1.
ASX’s regime for cancelling trading errors
ASX has a prescribed cancellation regime for dealing with trading errors 28 that provides a measure of certainty to
participants as to when ASX will cancel an errant trade. Generally speaking, under that regime, subject to certain
conditions and exceptions:
•
a trade in the “extreme trade range” may be cancelled by ASX if it is identified by or notified to ASX within
the prescribed time limit; 29
•
a trade in the “qualifying cancellation range” may be cancelled by ASX if a party to the trade notifies ASX
within the prescribed time limit and the counterparty agrees to the cancellation; but
•
a trade in the “no cancellation range” will not be cancelled by ASX.
Errant trades are primarily assessed for cancellation by ASX having regard to the specific requirements under
ASX’s prescribed cancellation regime.
Persons affected by insider trading are likely to have remedies available to them under sections 1043A, 1043L and 1317HA. Persons
affected by the market manipulation or other market misconduct are likely to have remedies available to them under sections 1041A – 1041F,
1041I and 1317HA. Persons affected by a false or misleading market rumour are likely to have remedies available to them under
sections 1041E, 1041H, 1041I and 1317HA.
27 Plainly, such misconduct or rumour would not affect the transparency of the ASX 24 market and therefore ASX would have no power
under ASX 24 Operating Rule 3100 to suspend trading or to cancel or amend any trades on that score.
28 See ASX 24 Operating Rules 3200 and 3210 and the related Procedures.
29 For SPI 200 index futures and equity index futures contracts traded on the ASX 24 market, cancellation of trades in the extreme trade
range is not subject to the prescribed time limits for notification or identification of the trade.
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6.2.
The application of ASX Operating Rule 3100 to trading errors
While there is scope for ASX 24 Operating Rule 3100 to apply to a trading error and to empower ASX to cancel the
trade in question when it would not otherwise be able to be cancelled under the prescribed cancellation regime
mentioned above, that would be very much the exception rather than the rule.
As mentioned previously, ASX considers that the words “fair” and “orderly” have a particular meaning in the context
of ASX 24 Operating Rule 3100. ASX would not regard the fact that a participant may have executed a trade or
trades in a product in error at a price materially away from its current market price, of itself, to mean that the market
in that product was not “fair” and “orderly” for the purposes of that rule.
Where the market in a product is trading normally either side of an errant trade or trades (that is, there are no
unreasonable variations between prices immediately before and immediately after the errant trade or trades), ASX
considers that the market is orderly even though the errant trade or trades may have been executed at a price that
is materially away from the prevailing market price. The fact that the errant trade or trades happened at that price
was a function of the order or orders submitted by the participant who made the error and the application of normal
price-time priority rules, not a function of a disorderly market.
Generally speaking, the only circumstance where ASX will consider exercising its powers under ASX 24 Operating
Rule 3100 to cancel an errant trade would be where the trade has had a knock-on effect on the market for the
product in question and resulted in disorderly trading by other parties. In that case, ASX may consider cancelling
the errant trade as part of cancelling all of the trades affected by the disorderly trading.
ASX might also consider cancelling an errant trade under ASX 24 Operating Rule 3130 where the trade, if it was
allowed to stand, would:
•
materially distort important post-trade data relating to that product (eg its opening or closing price); or
•
materially and adversely impact post-trade processing for that product (eg by materially changing the level
of margins to be called in relation to that product).
It should be noted that under ASX 24 Operating Rule 3000, a trading participant is responsible for the accuracy of
the details, the integrity and bona fides of all trading messages submitted into the ASX 24 Trading Platform with its
unique identifier. If a trading participant submits an order in error and it results in a trade, then, unless the trade is
cancelled under and in accordance with the ASX 24 Operating Rules, the trading participant has to bear the
consequences of that error, including any loss associated with the trade.
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Annexure A:
The circumstances in which ASX might, or might not, close the ASX 24 market
ASX would consider closing the ASX 24 market ASX generally would not close the ASX 24 market
where:
where:
• ASX suffers a major systems failure that requires • Another market operator (such as Chi-X, NSX,
the ASX 24 market to be closed or the trading
SSE or FEX) suffers a major systems failure that
platform to be shut down and re-booted
requires its market to be closed or its trading
platform to be shut down and re-booted
• There is an event preventing ASX from operating • Despite the event, ASX can continue to operate
both its primary and back-up sites (eg a major
effectively from its primary or back-up site
earthquake, flood or other calamity affecting both
sites or simultaneous threats requiring staff to be
evacuated at both sites)
• There is a widespread event (eg a major • Despite the event, in ASX’s opinion, sufficient
earthquake, flood or other calamity) preventing a
participants are able to operate effectively from
significant proportion of participants from operating
their primary or back-up sites so that the market
both their primary and back-up sites
can perform proper price discovery
• ASX is subject to a successful “denial of service” • Despite the attack, in ASX’s opinion, sufficient
attack that prevents a significant proportion of
participants can still access the market so that the
market can perform proper price discovery
participants from accessing the market
• There is major failure in Australia’s communication • Despite the failure, in ASX’s opinion, sufficient
infrastructure that prevents a significant proportion
participants can still access the market so that the
of participants from accessing the market
market can perform proper price discovery
• There is a state of emergency warranting the • Despite the state of emergency, ASX can continue
closure of the market (eg an armed invasion of the
to operate effectively and, in ASX’s opinion,
country, large scale civil unrest or a pandemic
sufficient participants are also able to operate
affecting large numbers of staff at ASX and/or at a
effectively so that the market can perform proper
significant proportion of participants)
price discovery
• There is a significant announcement from the • The announcement is only relevant to a particular
government or a regulator affecting the entire
sector or product or, in ASX’s opinion, does not
market that, in ASX’s opinion, warrants the market
warrant the market being closed
being closed for a period to allow it time to absorb
the announcement
The circumstances in which ASX might, or might not, suspend trading in a product
ASX would consider suspending trading in a ASX generally would not suspend trading in a
product where:
product where:
• There is clear evidence of disorderly trading in the • Someone is alleged to be engaging in insider
trading, market manipulation or other forms of
product (eg due to the impact of a “rogue”
algorithm) and it is appropriate to suspend trading
market misconduct in relation to a particular
to prevent that disorderly trading from continuing
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1 March 2016
Guidance Note 10
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ASX 24 OPERATING RULES
Guidance Note 10
product traded on the ASX 24 market but their
conduct has not led to disorderly trading
• There has been an ASX system or process • Someone is alleged to have spread a false rumour
that may have materially affected the price or value
breakdown preventing the dissemination of
of a product traded on the ASX market but the
information, or causing the dissemination of
materially false or misleading information, about
rumour has not led to disorderly trading
the specifications of a product or pre-trade or posttrade data about the product and it is appropriate
to suspend trading to prevent orders being placed
and/or transactions occurring at an inappropriate
price
The circumstances in which ASX might, or might not, cancel an errant trade outside
of the prescribed cancellation regime
ASX would consider cancelling an errant trade ASX generally would not cancel an errant trade
where:
where:
• The errant trade has had a knock-on effect on the • Despite the errant trade being executed at a price
market for the product and resulted in disorderly
materially away from the prevailing market price:
trading by others in the product
• it has not resulted in disorderly trading by others
in the product;
• The trade, if it was allowed to stand, would
• allowing the trade to stand will not materially
materially distort important post-trade data relating
distort important post-trade data relating to that
to that product (eg its opening or closing price)
product (eg its opening or closing price); and
• The trade, if it was allowed to stand, would
• allowing the trade to stand will not materially
materially and adversely impact post-trade
and adversely impact post-trade processing in
processing for that product (eg by materially
respect of that product
changing the level of margins to be called in
relation to that product)
ASX 24 Operating Rules
1 March 2016
Guidance Note 10
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